Rex Tillerson, the nominee of President-elect Donald Trump for secretary of state, is severing ties with Exxon Mobil through a $180 million retirement package one week before his Senate confirmation hearing begins.
Tillerson will surrender, if confirmed, all unpaid stock that was part of his pay package, more than 2 million shares. In exchange, the company will make a cash payment equal to the value of those shares to a trust to be overseen by a third party, according to a regulatory filing Wednesday with the Securities and Exchange Commission.
Because of the way the compensation is being dispensed, Tillerson will give up about $7 million, compared with what he would have been paid had he retired in March as he had planned to do before the nomination.
Tillerson, who worked for Exxon for more than 40 years, would have reached the company's mandatory retirement age of 65 by March, after which he would have received the payout from Exxon over a period of 10 years.
If Tillerson returns to the oil and gas industry within 10 years, the money in the trust would be paid out to charities of the controlling trustee's choosing.
With the appointment of Tillerson as secretary of state comes a host of thorny conflict-of-interest issues. The placing of the funds into a trust is intended to allay concerns that decisions made by Tillerson as a member of the Trump cabinet could help him or his former associates.
Darren Woods, a 25-year Exxon veteran who had served as the company's president, took over as CEO of Exxon Mobil at the start of the new year.
Tillerson began his career at Exxon as a production engineer straight out of the University of Texas at Austin in 1975. He replaced longtime CEO Lee Raymond in 2006 and led the company during one of the most turbulent periods in its history, which included the 2008 financial crisis and a collapse in oil prices since mid-2014 that has sharply diluted Exxon's profits.
The Associated Press provided this report.